Dogecoin Makes History: Is the Bearish Phase About to Change?

According to the crypto analysis tool, ‘Santiment’ on X, over 413,000 Dogecoin (DOGE) wallets holding 0.001 to 1 DOGE have been created within the last two weeks. This development marks the fastest growth rate of the memecoin since its inception.

🐶 #Dogecoin’s value is -23% since its top on Dec. 9th. But the #memecoin’s wallets with >0 $DOGE coins has been growing at the fastest rate in the network’s decade long history. 413.8K new wallets, mostly holding 0.001-1 $DOGE, have been added in 2 weeks. https://t.co/GjDghuB9H9 pic.twitter.com/l6Pv0KvkKW

— Santiment (@santimentfeed) February 6, 2024

Reportedly, this network growth has come despite the decrease in DOGE’s price. Since December 9, the price of DOGE has decreased by 23%. However, the increase in the metric suggests that user adoption is high, and could be linked to several reasons.

Two Factors Probably At Play

Although unconfirmed, the surge in the number of new addresses could be connected to Doginals and the development of DRC-20. ‘Doginals’ are inscriptions on the Dogecoin network while DRC-20 tokens are the fungible assets minted from the inscriptions.

A few days ago, crypto web3 wallet and exchange OKX disclosed that it now supported Doginals. Days after, ‘IntoTheBlock’ reported a surge in new addresses that have made the first DOGE transactions.

However, another possible reason could be the speculation that Dogecoin would be included in the payments segment of X (formerly Twitter). Coin Edition reported the handle’s launch and DOGE’s price soared as a result.

DOGE Is Not Ready to Rally

At press time, DOGE’s price was $0.078, indicating a 3.72% increase in the last seven days. From a technical point of view, the 4-hour chart showed that DOGE has been changing hands between $0.077 and $0.080 since January 30.

Also, sellers have dominated the momentum for most of this period. A look at the Relative Strength Index (RSI) showed that attempts by bulls to push up the price have been met with rejection.

For instance, the RSI climbed to 52.30 on February 5. But this movement was short-lived and the reading was 47.95 at press time. If the influx of new addresses continues to jump, and buying pressure for DOGE comes into play, the price might reach $0.085.

In a highly bullish case, DOGE might retest $0.090. However, if bears dictate the movement, DOGE’s price might fall as low as $0.075 in the short term. Another indicator considered was the Moving Average Convergence Divergence (MACD).

DOGE/USD 4-Hour Chart (Source: TradingView)

As of this writing, the MACD was zero to the negative side. This reading suggests that the coin was torn between being in the control of buyers or sellers. With this position, DOGE might continue to move sideways.

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